MINE-DFUL INVESTMENT

Iran 2017 | INDUSTRY & MINING | INTERVIEW

TBY talks to Mehdi Karbasian, Deputy Minister of Industry, Mine and Trade & CEO of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), on increasing production, competitiveness, and partnerships.

Mehdi Karbasian,
BIOGRAPHY
Mehdi Karbasian was born in Isfahan in 1951. He received his bachelor’s degree in auditing from Tehran University in 1973 and got an MBA from Oklahoma City University (OCU) in 1978. In 2003 he received a PhD in applied management from the University of Paisley in Scotland. Prior to his current position as Deputy Minister and Chairman of IMIDRO, he held many leading domestic and international positions at among others the National Iranian Oil Company, the Social Security Organization, the Ministry of Finance and Economy, Sepehr Energy Co., Kharazmi Investment Co., OPEC, and the Islamic Development Bank. He has also served as Deputy Minister of Transportation and Petroleum.

How does IMIDRO support the development and international competitiveness of companies in the mining industries?

IMIDRO is owned by the government but manages mining and the mining industries like a private-sector company. Our job at IMIDRO is to invest, either by ourselves or in partnerships or joint ventures with the private sector in Iran or foreign investors. IMIDRO is required to have at least a 49% share in every investment we do with private sector investors. We can get loans, provide finance, and enter joint ventures with other Iranian and foreign companies to invest inside or outside Iran. The government is keen to invest in the mining sector, and IMIDRO has a key role to play in this.

What are IMIDRO's main activities in supporting mining companies and increasing their production output and international competitiveness?

One of the major functions we have is to advance exploration. Iran is 1.6 million sqkm and, unfortunately, is behind in exploration. Iran is a mining country with deposits of 68 different minerals. Therefore, we invest and insist on investment in exploration. The mining industries are in an early stage of development. We have started with 250,000sqkm of exploration, and hopefully by YE2017, we will have good news for the Iranian people about new mines. Right now, Iran has more than 57 billion tons of potential mining reserves, and 3 billion of that is iron ore. We have to ensure we have sufficient investment in the mining sector. We believe we need USD50 billion in investment in the mining sector over the next five years. Some USD13 billion of that is going to be invested in steel and the rest will be spent in other fields, such as aluminum, copper, gold, zinc, and nickel. We are working to activate new projects in the mining sector as we did with zinc in Mahdi-Abad. We still have seven steel projects in Mobarakeh. At the National Iranian Copper Industries Company, we are working hard on the production of copper cathodes at Sar Cheshmeh and elsewhere. In gold, we have the Zareh Shuran and other mines.

How do you evaluate the effects of the JCPOA on the feasibility of international partnerships?

Hopefully, following the lifting of sanctions negotiated by the government, the path will be cleared for us to work with foreign companies. In 2017, we have had good meetings, many MoUs, and even some projects awarded. For example, in the fields of consultancy and the transfer of technology we have had good results. Right now, we have an overseas consultancy firm working in Iran as a contractor in the titanium segment. Iran has high tech know-how in steel, and we are self-sufficient. In copper, we have had some good meetings with companies like Glencore. We are also in touch with international companies in the gold segment, and we see a good chance of forming MoUs with and partnerships.

What is your outlook for the share of Iran's mining industries in the domestic economy and its share in the global mining sector?

It is best to adopt a strategy of not selling our raw materials. Iran has the gas and the experts to produce finished, value-added products. We do our best to produce our final products at a low cost, using high-tech processes. As a mining country, sometimes our demand and supply balance is not equal. Sometimes our supply is greater than demand, for example, in iron ore and steel. Our target for 2025 is to produce 55 million tons of steel in Iran, and more than 14 million tons of that will be for export. Therefore, we believe we need to have better relationships with other mineral-producing countries and companies. For example, in 2016 we exported more than 5 million tons of steel and part of that was to Europe. Healthy companies have to depend on exports, technology, lowering costs, and having sound HSE and environmental practices.